This is not just news, but an opinion piece: recent events have led industry watchers to question PlayStation’s identity and direction more than ever. Hideo Kojima moving Physint to Xbox has become the latest and most striking development in this debate.

Live Service Strategy Still Failing to Deliver

Sony’s biggest move in recent years was investing in live service games to secure recurring revenue. So far, the results have been disappointing. Concord was reportedly pulled after selling less than 25,000 copies in its first week, marking one of the biggest publishing failures in PlayStation history. Bungie’s Marathon has only a few thousand concurrent players on Steam, and the studio’s CEO stepped down in June. The Last of Us Online was canceled, Destiny 2’s content production ended, Horizon Hunter’s Gathering was sent back to redesign, and two unannounced live service projects at Bend Studio and Bluepoint Games were also canceled after Concord. Sony CFO Lin Tao admitted the strategy has been "far from smooth" but emphasized the company is not abandoning the plan, pointing to Helldivers 2, MLB The Show, Gran Turismo 7, and Destiny 2 as steady sources of revenue.

Kojima’s Xbox Move Is a Symbolic Blow

Sony quietly ended its partnership on the spy game Physint in June, and the project’s move to Xbox sparked outrage in the PlayStation community. Many on social media expressed frustration that "Sony, which has no problem funding Concord and other live service flops, canceled a proven director’s game." Xbox already owned the rights to Kojima’s horror project OD, and with Physint joining the list, Microsoft secured two major projects from one of the industry’s most respected creators.

Uncertainty on the Single-Player Front

Even the big names that define Sony’s single-player identity are under pressure. Naughty Dog’s Intergalactic: The Heretic Prophet has shared almost no new details since its reveal at The Game Awards 2024. Observers note the studio faces mounting expectations, and the project is expected to redefine PlayStation’s single-player reputation. On the hardware side, concerns are growing as PS5 sales decline year-over-year, raising questions about the future of the PS5 Pro.

The Flip Side

It would be incomplete to see the picture as entirely bleak. PlayStation CEO Hideaki Nishino emphasizes that console gaming is not dead and remains central to the company’s business. Sony is also set to earn significant revenue from its marketing partnership with GTA 6, which could provide financial breathing room for new strategies. Additionally, live service games still account for about 40 percent of Sony's first-party software revenue quarterly, and 20-30 percent annually. So, while the strategy hasn’t been a runaway success, it’s not a total loss either.

It’s Not Just One Incident

The real issue is the cumulative effect of these developments. Kojima’s departure alone may not trigger a crisis, but combined with repeated live service failures, delays, restructurings, and hardware price hikes, it leaves the impression that PlayStation’s short-term priorities are unclear. Industry analysts believe the real turning point will be how strong upcoming single-player projects—especially Naughty Dog’s new game—turn out to be.

Frequently Asked Questions

Has Sony completely abandoned its live service strategy?

No. The company has acknowledged repeated failures but says it will continue the strategy, citing successes like Helldivers 2.

Why did Kojima's Physint move from PlayStation to Xbox?

Sony announced its withdrawal from the project in June 2026 without providing an official reason. Xbox soon confirmed it had taken over the game.

Are PS5 sales really declining?

Yes, reports confirm that PS5 sales are falling year-over-year, raising uncertainty about the long-term prospects of the PS5 Pro.